Regis Resources Limited

Thank you for standing by and welcome to the Regis Resources quarterly briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr Jim Beyer, Managing Director and CEO. Please go ahead.

Thanks, Harmony, and thanks, everybody, for joining us on the call this morning. for the Regis Resources March 2024 quarterly update. Today, I'm joined by our Chief Operating Officer, Michael Holmes, and our Chief Financial Officer, Anthony Rakiki. And also, welcome to the table and to the team, our Head of Investor Relations and External Affairs, Jeff Sansom. To start with, at Regis, our imperative is to produce profitable ounces safely. And at the end of the quarter, I'm really pleased to say that a key safety indicator has continued to trend in the right direction. And we've achieved our lowest LTIFR, which is the lost time injury frequency rate. We've achieved the lowest on record at 0.34. Now, of course, I would note that while it's a great outcome and well done by the team, This is a journey with no end, and we'll keep working hard to make sure we keep this performance running. On to our operations and high-level financial metrics. Across the business, the quarter, and it should be no surprise that our production was impacted by the heavy and protracted weather events within the Western Goldfields region. Anecdotally, nearly a year's worth of rain fell over parts of WA and the Goldfields in March, And our teams did exceptionally well to respond and to manage that deluge and to deliver production for the quarter at 90,600 ounces at an all-in sustaining cost of $2,735 an ounce. Now, I would note across our business, $234 per ounce of that is non-cash. And Anthony will talk some more on this shortly. Look, Michael will discuss the specifics of the weather events in a moment as well. But as a general thematic, as a result of the weather and the disruptions it caused, we saw reduced mining rates and a higher proportion of processed stockpiles. So basically, our production for the quarter was always going to be softer as we'd highlighted or identified, be softer than the prior quarters as we'd flagged, but then this was amplified by the weather and this impact artificially pushed up our AISC, our all-in-sustaining costs, unit costs. Naturally, as we revert to normal operations and production, we will see our costs drift back towards the first half of this year's levels to the tune that we will still comfortably fit within our FY24 production cost and guidance ranges. Look, I would note realistically that we're likely to see a hangover of this quarter in FY24 production and AISC, both of which will be within our guidance ranges. albeit production with a bit more accurate understanding of the weather events now. We see production below the midpoint of guidance and conversely all in sustaining at the top end. On the significant positives for the quarter, like us, I'm sure that most of you will have been watching as the gold prices continue to climb. From the beginning of January to the end of March, the gold prices increased by nearly of the order of $400 an ounce, Aussie. which for Regis has meant that at the end of the quarter, selling 100% of our gold into the spot market means we've seen a cash build of $31 million, even in these trying times. Having this full leverage of the gold price is a positive swing of something like $40 million versus how we would have been sitting had we not bought out the hedges position back in December. And just in case you're not aware, we did buy out our hedge book and we are now fully unhedged. Now, putting all of that together, i.e. our production lifting, our oil and sustaining costs reducing and a stronger gold price, we can expect to see some solid improvements in our cash generation going forward. We also made some good progress on our value growth area, but I'll cover a bit more of that towards the end of the call. I'd now like to hand over to Michael, who will provide some more information on the operational performance.

Thanks Jim and good morning everyone. For the operations, as Jim mentioned, the regional wet weather that occurred primarily during March has impacted our quarter three gold production. At Duketon North and South, the weather event temporarily washed out several access routes to site, which meant access for road freight and access across the sites via haul roads was challenged. The impact of mining and processing activities, however, had limited disruptions. During the quarter, Jigden South produced the lion's share of gold with 59,017 ounces at an all-in-sustaining cost of $2,435 an ounce. We continued mining at Garden Well Stage 6, and during the quarter, Ben Hur and Russell's Find opened pits. Both commenced commercial production. With Ben Hur and Russell's find in commercial production, the growth capital pre-stripping activity ceased, resulting in a lower growth capital spend of $14 million for the quarter. Duke and South will continue to produce ore from Garden Well, Ben Hur and Russell's find in quarter four. The Garden Well underground performed to expectations as we resolved the issues that impacted our development metres in the last quarter, and are comfortable that the mine will continue at that circa 3,000 metres per quarter, in line with historical performance. Looking to the quarter ahead, Duketon South operations, we now have sufficient access to the ore at Ben Hur and Russell's Fine, so we will see margins improve with stronger cash generated. At Duketon North, production was 8,466 ounces at an oil and sustaining cost of $4,054 per ounce. During the quarter, mining at Duke and North centred around uncovering the ironed haven ore and mining the Gloucester open pit at lower rates due to the weather impacts. Our mill throughput and recoveries were down on the prior quarter with the majority of ore from Gloucester pits and the stockpiles driving the oil and sustaining cost of $4,054. Of this, nearly $500 an ounce was the non-cash impact of processing stockpiled ore. In quarter four, we expect costs will come down to similar levels to that in the first half as we start to feed the softer iron ore for the final quarter before transitioning to care and maintenance. As for Tropicana and as announced in our release on the 18th of March, Tropicana bore the brunt of these rainfall events. The predominant impact on Tropicana was to the road infrastructure and supply access. With 310 millimetres of rain over three days, roads to the site were underwater, which cut access, preventing the supplies of diesel and other consumables. Processing was suspended from 22 March to 1 April, and the plant was brought back at full production through foot by 5 April. Open-pit mining was either closed or significantly restricted over a period of around five weeks. Open-pit mining has recommenced in early April, whereas the underground mining has been impacted for only a few days. The net results of these impacts was that Tropagana produced 23,200 ounces at an oil and sustaining cost of $2,887 per ounce, with the underground producing most of those ounces. Topatana is now back up and running, and production is ramping back up to previous production rates, and we expect quarter four to be a much stronger quarter. Across Duketon, we have access to war, and all our major planned maintenance activities are now complete. I will now hand over to Anthony, who will discuss the quarterly financials.

Thanks, Michael. First up, we sold just under 99,000 ounces of gold in the quarter at a record average price of $3,126 Aussie an ounce, and it was our first quarter in a long time without the impact of hedging. On the back of these record prices, we received $309 million of gold sales revenue. Operating cash flows remain strong, which are demonstrated in the simple waterfall graph that you see at figure three in the announcement. all made better by having no hedge adjustment columns to complicate the chart this time around. So back to Table 1 in the announcement, it's worth picking out our non-cash or inventory adjustments for $21.2 million, which is the expense related to drawing down stockpiles built up in prior periods. Given the weather impact, we had a much greater stockpile drawdown cost, hence that non-cash cost was higher this time around than usual. Now, drawing your attention back to Figure 3 and the changes in cash and bullion for the period. This waterfall chart is straightforward and demonstrates the relative simplicity of our business. But the overriding point is the $31 million of cash billed during the quarter. Overall, our operating cash flows were $108 million, with approximately $76 million coming from Dupton and $32 million coming from Tropicana. Capital expenditure was $55 million for the quarter, with the largest component of this being $24 million of waste removal, and then $17 million in underground development costs. Exploration and McPhillamy's expenditure combined for $13 million. Growth capital for the quarter was less than half of last quarter's, at $14 million. and was primarily related to the final pre-strip mining work at Ben Hur and Russell's Find open pits prior to the commencement of their commercial production. Now having spoken about growth capital, exploration and McPhillamy spend for the quarter, it's worth noting that we may come in above growth capital guidance but under on exploration and McPhillamy spend and therefore we're expecting to be materially consistent with the aggregate guidance for those areas of expenditure. Now back to cash and bullion, the closing balance was $186 million, which is a great outcome and would have been significantly higher if we had not seen weather impacting on our production figures. Needless to say, I'm quite excited thinking about what this figure will look like with a full quarter's uninterrupted production at these current spot gold prices. Furthermore, I'll also add in April, we received a tax refund of $20 million, made available for the last time for Regis through the ATO's lost carryback tax offset provisions, which allowed the company to effectively recognise carry forward tax losses immediately by way of receiving a cash refund. Like I said at the start, some very straightforward financials, so I'll hand it back to you, Jim.

Thanks, Anthony, and thanks, Michael, as well. Look, before I talk on growth, I want to cover a couple of things. Firstly, our teams did a fantastic job during a very challenging period. Despite significant rain, the teams ensured our operations continued, albeit impacted by the rain, of course, but continued safely. Well done to everybody involved. On our financial position, the simple waterfall from the figure that Anthony referred to As he said, simple waterfall is the best waterfall, but for me, the best part about it is that we have broken free, like reference back to the last quarterly, and we have no more hedge book adjustments, and we are in the position to meaningfully start building our cash, which is what we are doing. So moving on a bit and looking forward, during the March quarter, we put some really good news on the growth front as well. Starting off at Tropicana, we again showed why we view it as a Tier 1 asset. In February, we released the Tropicana Resource and Reserve Statement, which demonstrated its continued expansion over mining depletion. We saw reserves actually increase by 100,000 ounces. This is at 100%, despite mining depletion of something like half a million. And the underground reserves themselves increased to 660,000 ounces. And just to put this into perspective, when we bought Tropicana... The underground reserves at the end of December were 309,000 ounces. At the end of December 23, the last date for issuing, that had increased to 660,000 ounces and over that time we had produced 450,000 ounces from the underground. So this, the Tropicana is really, the underground continues, I think it's a very clear illustration of this story that we try to lay in front of people to understand that the undergrounds may not look like they have much life, but actually every year they just continue to replace, deplete, replace. And Tropicana is an excellent example when not only have we done that, but we've actually grown the asset in terms of reserves. To us, this combined with the exploration data indicates that Tropicana has the geological capability to host or support a mine life of 10 plus years. Another important step in the underground growth story is the Havana underground. In the February R&R statement, we announced the maiden reserve at Havana in the Havana underground. Look, to access these ounces, we need a decline in supporting infrastructure, and we expect the first stages of development of that access way to commence in the current quarter at Havana. Work to deliver the final approval of the full program is in progress. At Duketon, we're also continuing to progress our evaluation of the two new underground mining project areas at Gardenwell Main and Rosemont Area Stage 3. These two projects underpin an important component of our Duketon underground growth strategy. Under this strategy, we're targeting four to five separate underground mining areas And with that, we see Duketon having the potential to continually produce this 200,000 to 250,000 ounces of rolling production into the future beyond the current reserves, basically because the undergrounds will follow this trend of behaviour of replacing depletion and continuing to run for many years. Now we expect finalisation of the assessment of these two projects in the coming weeks. Should they be approved, Duketon will then have three underground areas producing a large proportion of our targeted production. Lastly, but certainly by no means least, I want to cover up on one of Australia's largest undeveloped open-pit gold projects at Macphilemys. After quarter end, we released an update to the scope and also the cost assumptions from Macphilemys. As we mentioned at the time, the scope of the project has seen some changes, in part due to the extensive permitting requirements in the area, but also due to significant inflation and overall cost escalation seen since 2017, the last time we actually formally updated on our cost assumptions. Nonetheless, with the recent updates to our estimates and the new scope, with the total capex up front, the project now sits at circa a billion, maybe a little bit over, with a life of mine The key piece here being the life of mine oil and sustaining costs being between $1,600 and $1,800 Aussie. Now we plan to complete and release the details of the DFS before the end of this financial year. Now this recent project value and construction cost optimisation work combined with some of the scope changes required to meet elements of the New South Wales permitting approval conditions has resulted in this changing to the original plans that we applied for in that permit. As part of this process, Regis is assembling the information necessary to make an application for the mods, as they're called, modification for the current New South Wales SSD, State Significant Development Approval. Now, modifications to existing approvals are quite common in New South Wales. A number of projects I'm aware of, some of them have had modifications that are into the teens and into the 20s. It's just a part of the way that you continue to grow and optimise these sites. and keeping the approvals current to suit. As I said, it's quite common that these are designs as the designs are refined and incorporated into the projects. Now, while this has the potential to be somewhat time consuming, it is not considered to be contentious. With this process underway, we will use the opportunity to continue to optimise the project particulars in the lead up to FID. Now, as such, putting all of that together, we don't expect to be in a position to consider the McPhillamy's FID until at least Q3 and FY25. Meanwhile, the Section 10 application is still being considered by the Commonwealth Government. We do anticipate a resolution within the coming month or so. So, with our near-term growth pipeline looking strong, McPhillamy's provides us with a wide range of optionality for the longer term. Now, to summarise, I guess, the March quarter, we delivered a very solid improvement in our safety performance, as measured by lost-time injury. We navigated the protracted weather events. We produced 90,000 ounces of gold and sold just under 100,000 in a record spot gold market. We reiterate our guidance, albeit weather-adjusted, and we do see production towards the lower end and, conversely, AISC at the top end. but still within our guidance range. See no reason to change it. We delivered organic growth at Tropicana with significant reserve extensions progressing a new underground area. We're in the final phases of Duketon evaluation of two underground organic production growth projects. We declared commercial production at two new pits at Duketon South. and we hold a greater degree of confidence in the assumptions and the value that underpins the potential development of macfilumines. So looking to this final quarter, with operations normalising after the rains, we see production strengthening and cost normalising, and we see a global macroeconomic environment that continues to support record spot gold prices. With this backdrop, Regis is in a really strong position and we look forward to continue building our cash while also executing on our growth plans as we capitalise on our near-term organic growth opportunities. So thank you and I'll now hand back to Harmony to help us out with questions. Thank you.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Alex Barkley from RBC. Please go ahead.

Thanks. Good morning, everyone. I just had a question about that Duketon underground target, the 200,000 to 50,000 ounces. Is that sort of a broad strategic target, maybe something internally you're working for, or is it a bit more specific to the current situation, calculated off your current lines, the potential ones, just trying to get a sense of How are you thinking about that target and when you want to achieve it and that sort of thing?

Yeah, if you have a look at one of our presentations that we've done, this is a picture that we've sort of been talking to for a while now. And it basically... You know, Duketon's production back probably four or five years ago was over 300,000 ounces. It was all oxide. It was all easy open pits. And the place has become obviously more complicated, deeper. The surface pit reserves have been dwindling. However, as we've progressed underground, we've seen a real opportunity to be able to set in place, and this is all part of our target, to get to half a million ounces as a target to drive to. We see, you know, realistically, what do we think that Duketon has got the capacity to produce? And I say this in the context of, of course, our exploration team is out looking for another garden well or another Rosemont half a million to a million ounce open pit. But in the meantime, how should we be, you know, how are we trying to drive Duketon? So if you have a look, there's a presentation, there's a little stacked chart, and on that we look and say, look, Duketon, we think, has got the capacity of around 200,000 to 250,000 ounces. On the back of what and why do we think that's sustainable? Well, it's our target of what we're trying to drive to. And if we look at each of our underground mines and we think currently, you know, the undergrounds can generate between 50,000 to, say, 70,000 ounces per annum each of that order. If you've got four of them, then you're starting to be able to hit that 200,000-plus production range. Then the second question that people would have is, well, hang on, your reserves aren't particularly long, so you're not going to do that for very long. And that's the other part of this story, is no, our undergrounds, and we're seeing this already in the undergrounds that we've got, and that's why I emphasise that Tropicana sees it, and you can go to other underground gold mining companies and see the same thing. The reserves, the nature of them, you know, they continue down plunge. We don't drill them out to demonstrate 10 years of reserves. Too damn expensive to do that. But you see this rolling continuity. So our strategy there is... We've got Rosemont already in an underground environment. Can we look to continue and maintain that production level? We think there's a good picture and a good story for that. Gardenwell South, obviously, is another production zone that's really just... I don't know, probably been in commercial production now for maybe 18 months, I guess. We're looking at the Gardenwell Main area as a completely independent new production zone. So, you know, the new production area at Rosemont, New Gardenville, Maine, you know, we push on with those and assuming we can get them sort of to a point where we can approve them. Then there's three. Okay, that's not quite the whole picture that we're looking for. Where else? Well, we look around our site. Ben Hur's got underground potential. All our open... Well, not all of them, but a lot of our open pits have got underground potential. You go back through some of our old releases a few years ago. Banigo was a potential target. We actually walked away from that because we barely started open pit mining. We went to Garden Well because it had better access to it. Declined Portal. You've got Banigo, you've got Ben Hur potential, you've got Toohey's Well. And then we've got some other greenfields discoveries as well, which are able to look obviously a little less mature than those. So we look to build up to that, get to that 200, 250. Is it guaranteed? No. Is there a clear pathways to how we see we can drive to that? We believe so. And that's sort of the basis of how we see that whole, what do we think Duketon is capable of, that's what we're driving it to. And of course, if we, when our exploration team is successful and finds another open pit, well, you know, we're off to another level of production, but that's a whole other story.

Yeah, okay, that's very helpful, thanks. Similar question around Tropicana, obviously a lot going on underground there as well. When should we expect sort of the tonnage and production pick up? on top of Boston Shaker, sort of Havana and Tropicana to pick things up. Is there a rough timeline or tonnage target that you have in mind? You mean from an underground point of view? Yeah, from underground. Yeah, like, you know, does production double or what have you?

Well, I mean, the mill there is full, right? Not from underground, I'm sorry, yeah. From underground? Right. Well, I mean, you know, Havana is a whole new area. Realistically, you're probably... I mean, we still... We haven't even done the final approvals yet, but you're looking at at least probably 18 months before you can see that as being a genuine contributor to the two major... See, we've got really two major production areas underground at the moment, Boston Shaker and Tropicana. And Havana will be a third, but I reckon that's a bit of the way down the track. And, you know, we can be a bit more definitive on the timing of when that would contribute once we've completed the final approvals. But it's not next week.

Yeah, all right, early days. All good. Thanks very much, everyone. Thanks, Alex. Thanks for your questions.

Thank you. Your next question comes from Hugo Nikolaki from Goldman Sachs. Please go ahead.

Morning Tim, thanks for the update this morning. I just quickly operationally just want to clarify on Dugden North just the comment going into care and maintenance shortly after June, was that just the mine and you still got a couple of months worth of stockpiles to keep processing there or is that the mill as well?

Did Michael answer that one? Yeah, so the mining at the moment, we're continuing with Eindhoven open pit, which is a softer material, and we plan to finish that towards the end of June. The other feed source, Gloucester, that'll be ramping down towards the end of May, and so the mill will be just processing the remains of Gloucester, Eindhoven and stockpiles. The idea is to complete the milling as of the end of the quarter and then just basically emptying it out and cleaning it out and preparing it for care and maintenance.

Right, thanks for clarifying that one. And then maybe one just a bit more high-level strategically. I mean, with the economics of myxilomies now maybe a bit more stretched than they were on the CAPEX increase and medium-term production declines still, you know, depending on where you get to on underground targets. How do you think about M&A in the current environment? And I guess would it be the right way for us to think about it in the context maybe of what you paid for Tropicana and annual gold production there and relative to where gold prices have gotten to now?

Yeah, look, there's a fair bit in that. But I guess the reality with... is it's obviously a significant chunk of capital. It's a great cornerstone for a business. I mean, it's got 10 plus years of production across the 2 million ounces of reserves over those 10 or 11 years at $1,600 to $1,800 an ounce. That's a great asset to have in your portfolio. It's like a... You know, the undergrounds are like sports cars that can go fast but need a fair bit of maintenance to keep them going. The big open pits of that size are just like diesel engines and just keep churning it out. So we like it in the portfolio, but the reality is that our task here is to ensure that we're finding the best opportunity for the application of our capital or the shareholders' capital. And so we need to make sure that we are looking at other opportunities as well. to basically square up against McPhilemys to make sure it's the best use. So what that means is that, yeah, we do have to be... I mean, it's a responsibility for us to be looking around for other opportunities that can compete with that capital. You know, existing operations that might have, you know, good life Of course, those sorts of opportunities are few and far between. I think the last time something decent came up like that was Tropicana, which, as everybody is now seeing, was a really great investment, by the way. So, you know, we will... Yes, the short answer is yes, we will continue to look at M&A opportunities. How does that fit? Well, if it works out, we think it's a better immediate use, then... That might be something that we pursue. In the meantime, we've got McPhillamy's as a great project sitting in the background that we continue to optimise and get ready for making a decision on.

Thanks for that extra colour there. I'll pass it on.

Thanks.

Thank you. Your next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi, Jim and Sam. Just continuing on that theme, McPhillamy's, Is the project still core to the business, or might you look to proceed, you know, get all the permitting done, get it in a shovel-ready position, and might you look to divest? Thank you.

Well, in the context of the question that I've just answered, just what I was saying is that, you know, McPhillips is a great project, albeit... quite a reasonable size larger than it was considered to be back in 2017, it's still a good asset to have in the portfolio. But as responsible managers, I guess, of shareholders' funds, we need to make sure that we're looking for the best return on their investment. You look at options. I need to be careful about how I answer that question because as soon as you say some throwaway line, it immediately goes up as a headline that we're not interested in it and we're looking at divesting in it. That would not be the case. um we like it as a project it's in our portfolio we're working hard at it um we just want to make sure that we we figure out the way to maximize the value that we can get from our shareholders and that ultimately is will drive any decision that we make and and what are the options in in competition i mean obviously you've got the underground futures that you're you're very strict and tropicanas that you're trying to um

exercise but is there also an option to do pit wall pushbacks in the Duketon Ridge and given the gold price or might you consider this cash harvest to be in the hands of shareholders and consider big dividends thank you yeah so the first coming back to you know what are the alternative I mean the undergrounds each time you set up one of these underground mines they're not

huge capex. Depending on the complexity, they can be anywhere from, say, 30 to 70 plus million, depending on the size of it and whether you have backfill in or not. So we're not talking... I mean, that is a lot of money, obviously, but relative to, say, $800 or $900 or $1 billion investment, they're actually pretty good returns and pretty quick to start returning. So And once you've got them started, the ongoing sustaining capex of those things is, to my tone of grace, pretty modest. So that's why we like them. We just like more of them. So, you know, that will just continue. In terms of our cash generation, look, you know, as the board will now be sitting down and watching our cash generation, Balance starting to grow significantly, which is what we expect it to in this price environment and the outlook. Capital management is certainly a question that will come... Well, I won't say will come back on the agenda. It's always on a discussion point around the board as to... as to the question of dividends or not. And we just will put that in the frame of, well, what are other opportunities for that capital? What's the potential timing for McPhillamy's? How might we fund that? So there's plenty of moving parts. You know, what does the outlook for gold look like? All of those variables are there. Certainly not in a position right now to say... what our policy may or may not be. It's suffice to say that it's always something at the board meetings that we, as part of the conversation, for the strength of the business and the cash flow generation as to what's the appropriate thing to do with that money as it's building.

Thanks, Jim, for your perspective.

No worries, Daniel. Thank you. Your next question comes from Alex Papineau from Citi. Please go ahead.

Hi Jim and team. Are there any one-off costs associated with putting Jupiter North into care and maintenance? And can you remind me, what are the care and maintenance costs associated with Jupiter North? Anthony?

Yeah, Alex, as far as the one-off costs, So we've been sort of accruing towards it. There's actually, from a materiality perspective, nothing material that's new that's going to jump out. That's something that we've looked at recently, including the demo costs and what we're doing with personnel and that sort of thing there. So certainly nothing that is going to shake our numbers or push us outside of what we've already planned for. or what's already in our guidance, I should say, as well.

Great. And then just any sort of maintenance costs going forward?

No, it's just that'll be minor costs, just rotating the mills once a month. So there'll be a small crew up there, two or three people that will be doing that. and then just sort of look at the camp. We basically shut the camp down and the people that we've got will be reallocated within the operations as we fill vacant roles.

That's helpful for us because we've got people that can fill vacancies at the moment and we know them and we trust them. They're good people.

Okay. And given that Russell's Fine and Ben Hur reached commercial production, is there expected lift in oven pit or tonnes going forward? Or should we expect similar production to the last few quarters?

I think, you know, our production will be consistent with our guidance, mate.

Yep, great. No worries, I'll pass it on. Thanks, Alex.

Thank you. Your next question comes from Meredith Schwartz from Bank of America. Please go ahead.

Good morning, Jim. Hi, Jim. Good morning. I just wanted some clarity on the cost front. With that non-cash stockpile inventory adjustments for FY24, is there going to be any of those ongoing into FY25 or is it just mostly isolated to FY24?

It's Anthony Meredith. I'll cover that for you. You really notice that obviously in this quarter because we have used those stockpiles because of the weather event. So let's just say it was a larger number than usual, particularly in this quarter. But as we're starting to get that ore levels building back up to more normal levels, then we should see less of an effect of the significant impact of those drawdowns on a cost per ounce basis.

Okay, perfect. Great, thanks. And also a question, I suppose, on McFillanese. Can you talk through... how you see that asset in terms of expiration. Do you see any... Obviously, you've got the, you know, potential mine life of 9 to 10 years, but what are you looking at in terms of expiration upside and potential for that mine life to go beyond that? And obviously, you know, the capex is potentially, you know, a whole lot higher, but if you've got that potential for extension of mine life, then, you know, that can, you know, deliver... additional value to that project irrespective of that capital cost upfront?

Yeah, that's a great question actually. And it's something that we haven't really spoken about too much. I mean, there's a couple of things I would point to. We have already a resource that's just down the road. I think it's about 25, 30 k's down the road called Discovery Ridge. It's got about 390,000 ounces in resource sitting there, which could obviously be fed into the plant. There's also, just across the road, there's a drill hole that we put in, and I'm just trying to remember how many metres at one gram per tonne it was, but it's an exploration potential. It's something that we actually drilled, apparently, quite a few years ago, and then the farmer sort of um wasn't interested in us being there but the farm became available for sale so we bought that so and then there's other we've got other holdings other exploration holdings in that region um you can sort of get a bit of a feel for it by looking at our uh our exploration update last uh probably went out about four months ago i reckon um and you can see we've got i mean that that area around the lachlan fold belt that's just spectacular country There'd be exploration companies that'd be floating off the back of this, just the exciting ground that we hold. So there's plenty of opportunity. And then the other one, quite frankly, is right on the site itself, the mineralisation continues down at depth. We know that. We've been having a careful look at that. The bottom of the pit is defined by economics, not by geology. It's not cut off. It's not a geological boundary. It's just an economic boundary and it continues on at depth. What we want to do is we want to understand just how big that could be. and what sort of production capacity we might be able to hold from there. But it's early days. But I think, you know, our bottom line is that period for that, it's all just, we're all just getting started on it. You know, McPhillamy's is not the end point, it's the beginning.

Yeah, yeah, no, thanks for that. And in terms of, you know, obviously there's a little bit of a period of wait to get those approvals. Can you do any... you know, any additional exploration work while that's still pending approvals? Or will you literally just, you know, put it on the back burner and concentrate more on, you know, exploration at DSO and Tropicana, you know, with the exploration spend?

Yeah, the short answer to that is no. The only thing that's holding us back from doing a bit more drilling and work on the site is the Section 10 application. That's, you know, we've got... We've actually got a couple of target areas that we want to pursue pretty quickly. One is at depth. There's also a little bit of mineralisation that's been identified within the shell that probably needs a bit more drilling to see whether that can convert to indicated. And there's an area that we... Probably not the best description of it, but it's called the pimple area. which has got some mineralisation that's never been, you know, got an opportunity to go and look at. So, yeah, there are some things that we would immediately... Oh, Michael's telling me it's now called the node. We don't call it the pimple anymore. We call it the node. So, you know, there's some opportunities there that we could certainly get into, and we'll look at that once Section 10 is clear.

Could I ask one more sneaky question? Have you given any guidance... Sneaky question. ..the cost of the decline for Chopper Kana for the underground there, the Havana? Have you given any guidance as to what the cost of that would be? No.

Look, the initial works that we're talking about getting started this quarter will be, you know, pretty low. It's setting up the portal and getting things ready to move. Once we've made the final full approvals, it's just to help, you know, get the momentum going on it. Once we've reviewed the project, made the final approvals, then we'll give some better guidance on that. You know, I mean, if I look at Duketon, indicative numbers for initial set-up, I think, you know, Rosemont was probably 40-odd million bucks to get it started, I think. garden well was probably a little bit more as I said I think these new starts by the time you put the portals and bed risers and all those sorts of things depending on how complicated it is it could be anywhere from at Duketon from you know maybe 50 million dollars to get it started and running to 80 plus depending on how much additional infrastructure is required But in terms of Havana Underground, once we've made the call and finalised it, the initial spend is not a lot. It's just to get things, start the ball rolling. Once we've got the final approval for the project, then we'll let the market know a bit more on the details of that.

Great. Thanks, Jim.

Okay. Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from Levi Spry from UBS. Please go ahead.

Good morning, Jim, and good day, Jim. Thanks for your time. Maybe just continue on a couple of those questions. Firstly, as you transition to underground, what sort of mining costs should we be, you know, mining costs for remodelling underground at Duketon and across the operations and also at TROPS?

Yeah, look, at the moment, we still obviously will give some understanding on what we expect the mining costs for these new areas to be once we've finalised it and approved it. I think, you know, when you're at a very high level, if you're looking at, you know, you look at the grades and you look at the oil and sustaining costs of what we've been doing historically, You can probably say that there's a pretty good relationship there, and if the grade's about the same, then the costs might be about the same once you get the set-up costs out of the way. One of the things that we're considering is backfill, which might add a little bit of the cost, but then that gets offset by improved capital efficiency. You know, we haven't finalised these new areas, but certainly if I'm looking at it at a high-level picture for my head, I don't see it being... I certainly wouldn't see the costs being any less than what they currently are for our undergrounds, which I think we sort of give some indication of in our reporting.

OK, so fantastic. And then just jumping back to the optimisation process at McPhillamy's, just catching up here a little bit, but can you talk us through what the big levers are? I understand the CapEx, not much of it can be postponed or pushed into sustaining or anything like that, so maybe that's not going to move much, so it feels like, and the ore body, the grade's sort of upside down, so it feels like the main lever is trying to bring some grade forward. Is that what we're, what are the big levers to improve the economics?

Yeah, look, from some perspectives, the project is quite, has got some pretty significant initial capex. So, you know, if you look at the pipe, if you look at it and say the capex is 900, you know, 900 mil, 165 of that is the pipeline. Can we optimise that? Can we, you know, no-one's developed a way of transporting water without a pipeline yet, or certainly not uphills, which is what we're trying to do. So, you know, the only thing we could look at there is, you know, there might be a different route that you could follow that didn't require as much high-pressure pumping, but... All of these things come with a trade-off, but you've got to look at those and make sure that you're not sort of writing them off too quickly. There will be some looking at the crushing and grinding circuit. Can we pull a few more... You know, can we delay one of the fine grinding towers or maybe use slightly different technology to what we've assumed that could be cheaper to install? The idea of high grading would be absolutely lovely. Well, it's a lovely idea, but, you know, the ore body is what the ore body is, and you can only... You know, there are limitations on how we can mine it, not the least of which is there's only a certain speed we can mine it because of the noise limitations. I think in the very early days, the assumption, and an example of that is in the early days, the assumptions were we were going to have three diggers, And then when we did the analysis with the sound, the sound restrictions in that part of the world meant we could only run with two, which sort of limits your ability to run with grade streaming, as they call it, otherwise known as high grade, and bring it forward. So there are some challenges there, Levi, but what we want to look at is back in the capital front, are there some things that we can push back on And, you know, can we do a bit more optimisation? But, you know, I mean, at the end of the day, we're not talking about something that's going to reduce the cost by 20%. So it's just number one is getting... ..increasing our confidence of the number being what the number is and not having a blowout as we get into construction. So that's a key element of making sure that we're checking things. And the other is just looking to see whether there's... you know, money that we can defer without cutting off our nose to spite our face sort of thing.

Yep, okay, thanks. And last one, just on the capital management sort of train. So late last year, I think you extended the maturity of your debt facility. What's the current thinking there in isolation without the, you know, backing out any decision-making around McPhillamy's?

Well, that money is now due middle of next year. And as we grow our cash now and we start to look at the requirements for metfilamies and anything else that we might be thinking about, as I sort of mentioned before, the question was asked about what else might you do besides metfilamies. That and how we deal with that $300 million is definitely something that comes into the equation. I mean, we could do everything from rolling it to maybe paying it down early as we start to build our cash. You know, the interest rate on that was great when we picked it up, so there's a couple of challenges there, but, you know, we've got options there. Roger, thank you.

Thanks.

Yeah, or, you know, I mean, frankly, you know, depending on what we do with the filaments, we could roll it into the refi of that.

Yep. Thank you.

Thank you.

Thanks, Levi.

There are no further questions at this time. I'll now hand back to Mr. Beyer for closing remarks.

No, look, thanks, Harmony. That's it. Thanks, everybody, for joining us on the call. As always, if you've got any follow-ups, please get in touch with us. Jeff's here and fully up to speed. So thanks, everyone, and let us know if you've got any questions. Otherwise, have a nice day. Thank you.

Thank you, and that does conclude our conference for today. Thank you for participating. You may now disconnect.